Rates freeze saves £308m but ‘more help needed’
Freezing the Scottish business rate for the coming year will save companies more than £300 million in the next financial year, but business leaders say there is still no level playing field with rivals south of the border.
Responding to a question from East Lothian SNP MSP Paul McLennan, the Minister for Public Finance Tom Arthur said freezing the non-domestic poundage rate at 49.8p is expected to save business ratepayers £308 million in 2023-24.
The Scottish Government points out that a rise in line with September’s measure of inflation would have resulted in a poundage rate of 54.8p in 2023-24. Mr Arthur’s reply is expected to be published on the Scottish Parliament website on Monday morning.
During the Budget presentation Deputy First Minister and acting Finance Secretary John Swinney mentioned a joint letter he had received from 19 business/trade groups and how it had influenced the decision to freeze the business rate.
However, there are already calls for the government to provide more help, particularly for those companies paying higher rates than rivals south of the border.
One industry leader said the government should go further and ease the burden on 12,000 commercial premises which continue to pay a higher business rate than counterparts or competitors south of the border.
David Lonsdale, director of the Scottish Retail Consortium, said: “Retailers breathed a sigh of relief at the decision to freeze the business rate. It means retailers – Scotland’s biggest private sector employer – will avoid a mammoth tax hike at a time when they are grappling with spiralling costs and an uncertain outlook.
“It’s good news too for hard-pressed retail destinations and for shoppers as it will ease upwards pressure on store prices.
“That said, the freeze shouldn’t be the limit of the Scottish Government’s ambition on rates. The burden remains onerous with the business rate having escalated to a 23-year high.
“Three thousand medium-sized and larger retail premises – and 12,000 commercial premises overall – continue to pay a higher business rate than counterparts or competitors down south, with little explanation as to why firms here are thought to be better placed to stump up more in rates.
“Business rates need recast for the years ahead, beginning with a timetable for returning the poundage to a permanently lower level and faster restoration of the level playing field with England on the higher property rate.”
Gross savings to ratepayers of poundage freeze compared with maintaining real terms income
|Property class||Savings to ratepayers due to poundage freeze (£)|
|Leisure, Entertainment, Caravans etc.||10,667,000|
|Garages and Petrol Stations||2,627,000|
|Education and Training||28,257,000|
|Public Service Subjects||14,615,000|
|Quarries, Mines, etc.||485,000|
|Health and Medical||11,259,000|
|Not in Use||0|